Bankruptcy Lawyers Need to Know How to Help Clients Modify their Mortgages - Los Angeles Bankruptcy Attorney - Southern California Bankruptcy Attorney | B & C LAW

Bankruptcy Lawyers Need to Know How to Help Clients Modify their Mortgages

Board Certified Attorney Erik Clark, featured in the National Association of Consumer Bankruptcy Attorney’s Law Journal

In a recently published article, Attorney Erik Clark shared his recommendations for bankruptcy attorneys nationwide on the need to properly prepare to fight the upcoming rush of foreclosures. 

An original pioneer of the Mortgage Modification program, Erik advocated for adopting a court-approved mortgage modification program in the Central District of California. He was successful in his efforts, and thanks to many years of diligent hard work and advocacy, Borowitz and Clark can now improve the likelihood of success for clients who are fighting to save their homes. 

Why is modifying a mortgage during bankruptcy important? 

When a person enters into a personal reorganization, all of their debts are combined into one monthly payment. This often includes mortgage arrears that are the result of missed mortgage payments prior to filing.  Many individuals who file for a personal reorganization have tried to work with their mortgage servicer only to be caught in a frustrating paper chase.   

Erik, and the team at Borowitz and Clark, advocated for a bankruptcy court-approved mortgage modification program because it has a proven track record across the United States.  The mortgage modification program helps by providing court oversight of the modification process and provides for a transparent document portal to submit the documents that are required in order for the servicer to analyze options for modifying a particular loan.  Gone are the days of faxing documents to an unknown phone number only to be told that the servicer did not receive them. 

How does a bankruptcy court-approved mortgage modification program work? 

During the Chapter 13 process, the law firm files a motion to allow the debtor to participate in the program.  Once approved, the mortgage servicer is required to review a comprehensive application that outlines the client’s financial situation. The servicer is required to communicate with the lawyer, review the application, and provide a decision to accept the application and either modify the mortgage, or deny it. The attorney can appeal or request mediation even if the first submission is rejected. So no, doesn’t always mean no the first time the servicer responds.

The popularity of court-approved mortgage modification programs continues to grow nationwide. Courts recognize the need to help homeowners modify their mortgages, especially now, after the pandemic, because the various mortgage moratoriums have expired and homeowners have to restart payments or risk foreclosure. 

What if the home was in foreclosure before the pandemic? 

Now is the time to act! Working with a bankruptcy attorney who understands foreclosure, and has experience working with the bankruptcy court’s mortgage modification programs gives you a fighting chance. 

How can I find out if I can modify my mortgage? 

A free consultation, conducted by phone or video, is required for Erik and his team to review your situation and provide you with options. 

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